European Capital Goods: Views and expectations into Q3 results - Outlook commentary more important than Q3 beats

The demand environment for power gen and electrical equipment remained very strong during Q3, PMI's continued to push higher, swift price/cost actions were taken early in Q2 and again in Q3 (in places), and further tariff refunds are probable. While the net of this should see more beats than misses in Q3, what matters more given the volatile macro and geopolitical situation is the commentary regarding Q4 and 2027. With a September year end for Siemens, Rockwell and Emerson (plus the 'Initial Assumptions' slide in Eaton's Q3 deck), outlooks will be in focus - expect a degree of conservatism and consensus straddling, for now. Longer term, the implications of Europe's increased emphasis on security, resiliency and strategic autonomy should be a longer-lasting, policy-supported capex cycle spanning defence, energy, grid, industrial capacity, digital infrastructure, and selected critical supply chains. Our coverage trades on ~18.8x 1-year forward adj. P/E, at a 37% premium to MSCI Europe, c